Cryptocurrency entrepreneur Do Kwon is scheduled to be sentenced Thursday, December 11, 2025, in Manhattan federal court for misleading investors in a collapse that wiped out billions from the crypto market in 2022.
Kwon, the South Korean co-founder of Terraform Labs, pleaded guilty in August 2025 to federal fraud charges linked to the failure of the Terra ecosystem, which included the algorithmic stablecoin TerraUSD (UST) and its sister token Luna.
The collapse erased roughly $40 billion in market value.Under his plea agreement, Kwon agreed to forfeit over $19 million.
Prosecutors are seeking a 12-year prison sentence, citing the scale of the fraud and its widespread financial impact.
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Kwon’s defense team is requesting a lighter sentence of no more than five years, arguing that his misconduct stemmed from hubris rather than deliberate greed and noting the time he has already spent detained abroad.
Kwon was extradited from Montenegro in 2023 after being arrested for traveling on a false passport.
Analysts say the sentencing could set a significant precedent in the U.S., signaling stronger accountability for high-profile crypto figures following the 2022 market downturn.